For those tracking social media developments in labor law, September was noteworthy as the National Labor Relations Board (NLRB) issued its first two decisions taking on an employer’s social media policy in Costco Wholesale Corp. and Karl Knauz Motors, Inc. Readers may recall that over the past year the NLRB Acting General Counsel Lafe Solomon issued a series of memoranda that provided insight into its interpretation of how the National Labor Relations Act (NLRA) applies to social media policies and adverse employment decisions based on social media conduct. The current board’s latest decisions make clear that it seeks to follow the path set by Solomon and expand its influence in the workplace through social media cases.

Take Two

In Costco Wholesale Corp., the board issued its first decision and order addressing questions over an employer’s policy as it relates to social media. Costco’s “Electronic Communications and Technology Policy” stated:

Costco recognizes the benefits associated with electronic communications for business use. All employees are responsible for communicating with appropriate business decorum whether by means of e-mail, the Internet, hard-copy in conversation, or using other technology or electronic means. Misuse or excessive personal use of Costco technology or electronic communications is a violation of Company policy for which you may be disciplined up to and including termination of employment. Your use of Costco technology and electronic communication systems represents your agreement with the following policies:

. . .

Any communication transmitted, stored or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. Employees should be aware that statements posted electronically (such as online message boards or discussion groups) that damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.

The good news for employers out of this decision was limited to the fact that the board found the rule requiring employees to use “appropriate business decorum” was lawful under the NLRA. However, the board disagreed with the administrative law judge’s (ALJ) recommendation and found the portion of the policy prohibiting statements that damage the company or another individual’s reputation violated Section 8(a)(1) of the NLRA. In contrast with the ALJ, the NLRB found that employees would reasonably construe the rule as prohibiting Section 7 activity. Specifically, the NLRB found the “broad” prohibitions against damage to the company or another individual’s reputation included communications by employees that protest how the employer treated its employees. The opinion also distinguished other cases relied upon by the ALJ to find the policy lawful as including greater contextual detail than was apparent with Costco’s policy. Where other policies contained similarly broad language, they included rules that addressed conduct that was not protected by the NLRA, such as “verbal abuse,” “harassment,” and “conduct which is injurious, offensive, threatening, intimidating, coercing, or interfering with” others. For the board, there was no other language surrounding the policy at issue that could reasonably restrict its application to activity not protected by the NLRA.

The board also issued its decision following review of another employer policy in Karl Knauz Motors, Inc. The employer at issue owned and operated a high-end car dealership. In adopting the ALJ’s findings, the board analyzed the employer’s policy that provided:

Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and supplies, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

The board found this policy, too, was unlawful and violated Section 8(a)(1) of the NLRA. The board noted there was no language in this policy that might limit the extent to which it applied. Additionally, the board determined that the policy could reasonably be interpreted by employees to chill protests or criticisms of terms and conditions of employment for fear they may be seen as “disrespectful” or “injur[ing] the image or reputation of the Dealership.”

Hayes’ Dissent

In a strong dissent, Member Hayes directly challenged the board’s reasoning over how employees would interpret this policy. Member Hayes argued that the board read parts of the policy in isolation to find chilling qualities rather than consider the whole context in which the policy existed. Further, he argued the board judged the lawfulness of the policy based on its understanding of how employees could read the policy as opposed to how it would be reasonably understood. For employers, this dissent offers insight into how the current social media decisions might be interpreted by a future board.

Notably, the board also affirmed the ALJ’s conclusion that the employer did not violate the NLRA where it terminated an employee for his Facebook postings. In addition to the policy at issue, Solomon argued that the employer terminated the employee for engaging in protected concerted activity after the employee posted remarks critical of the employer’s sales promotion efforts. However, the ALJ found that the true cause for termination was based on unprotected posts occurring days later that made light of a vehicle accident occurring on an adjacent dealership lot. This decision by the board stands in contrast with the reasoning and recommendations contained in the August 18, 2011, General Counsel Memorandum.

Employers following these opinions should note they affirm that context and specificity play an important role in whether the general counsel, and now the board, considers a policy to be lawful under the NLRA. As Member Hayes dissent points out, however, whether language will be considered overbroad is not always clear. Additionally, in each case the board noted the absence of a “savings clause” that prevents the policy from applying to Section 7 protected conduct. The board has yet to specify the extent to which such limiting language could make the policy a lawful one.

Keeping Compliant

Although this is unlikely to be the last word on this issue, addressing these issues in your policy may redirect the NLRB’s attention away from your policy. Higher courts or future NLRB members may take issue with the board’s conclusions that employees would reasonably construe rules as prohibiting Section 7 activity as the analysis to this point seems speculative and largely unsupported.

This opinion also continues to highlight the concerns all employers should have in complying with the NLRA. These social media issues, along with other efforts in recent years, demonstrate that the NLRB is trying to flex its muscle more and more outside of strictly organizational concerns. Ensuring your policies comply with these requirements, which may not seemingly be as prevalent of a concern for your workplace, is important because you may be the target of a complaint whether your workforce is organized or not. Employers concerned over whether their policies comply with the NLRA should consult counsel well-versed in this area of the law.